“2023 TURKEY VISION”
CALL FOR ACTION
TOWARDS A GLOBALLY COMPETITIVE KNOWLEDGE ECONOMY AND EUROPEAN UNION ACCESSION
4-5-6 May 2005, Swissotel, Istanbul
This year’s Forum Istanbul has promoted a multi-stakeholder dialogue on what it takes to create an effective knowledge economy with a view to providing policy and action options for the Government, private sector and civil society. Its main goals have been to contribute to Turkey’s preparation for accession negotiations with the European Union (EU), due to commence on 3 October 2005, and develop the building blocks of a robust knowledge society by 2023, the centenary of the Republic’s founding.
The call for action set out below has been prepared by Mehmet Öğütçü, Paul Atkinson and Yusuf Işık, discussed and commented by key Forum stakeholders. It is issued under the responsibility of the Forum Istanbul Institute.
1. In today’s information age knowledge has become the gold standard. There has been a swift transition from the Industrial Age to the Knowledge Economy and Information Age. Economic activity is increasingly exposed to international competition shaped by how regions, countries and companies manage information, innovate and deploy science and new technologies, notably in the areas of information and communications.
2. In a Knowledge Economy knowledge is created, acquired, transmitted and used effectively by enterprises, organizations, individuals and communities. Participants at the Forum stressed that Turkey, as a dynamic country destined to become a full member of the European Union (EU) in the next decade or so, must strengthen its capacity to adapt to the changes taking place in the global economic environment and to acquire, develop, share and apply knowledge to secure high value-added jobs for its rapidly growing and young population. It would be a major mistake to depend on cost advantages provided by low wage labor, which in any case will be eroded over time by competitors such as China, especially since the EU itself is striving to become the “most competitive knowledge-based economy” in the world by 2010.
3. It was clear from discussion that Turkey has made great strides in recent years: the business environment has become more stable as inflation has declined to single digits and real interest rates have dropped rapidly, foreign direct investment has significantly increased, some progress has been achieved in basic and secondary education, an institutional framework to support innovation has been developed, and an internationally competitive private information and communication technologies (ICT) sector has emerged.
4. But much more needs to be done. The World Economy Forum (WEF), for example, ranks Turkey 69th globally in terms of competitiveness, behind all the new EU member countries and candidate countries. Similarly, again according to the WEF Network Readiness Index Turkey ranks 52nd among 104 countries. Developing the competitive, knowledge-based economy that integrates well with the EU will require institutional adjustment, adaptation and active participation by all segments of the Turkish society.
5. Forum participants explored many of the issues that must be confronted and debated a wide range of options for broadening the foundations of the knowledge economy and enhancing prospects for success. During the course of these discussions a number of themes emerged:
- ‘The knowledge society’ is a useful expression but great care must be taken and not to treat it as an empty catchword.
- Governments have to create favourable framework conditions and also help grapple with outside events and pressures, such as energy crises. But it is people, especially innovative ones, who by their actions and imagination take a nation forward to economic dynamism and prosperity.
- The ability to use information and communications technologies effectively is a key building block of the knowledge economy. The design of the “Turkey e-Transformation Project” should be comprehensive, focusing not only on the diffusion of ICT and development of infrastructure but also on measures to facilitate its effective and widespread use. These include strengthening digital literacy, enhancing on-line security and trust and, wherever possible, improving public services with digital delivery.
- The knowledge economy is evolving rapidly on a global basis, affecting more and more sectors, government functions, and engaging increasing numbers of countries. In Europe, the Lisbon Agenda agreed by the EU Council in March 2000, despite its visible shortcomings, provides a framework for future action in recognition of the need to remain competitive in a changing world. Turkey will have to take this into account as it prepares for EU accession while at the same time looking beyond the EU for new partners an sources of inspiration.
- Taking advantage of the knowledge economy requires full participation in the international economy. Essential elements are an outward orientation that encourages an increasingly diversified range of high value exports, better efforts to attract “quality” foreign direct investment and stimulating international mobility of highly qualified people.
- The government must play its own role well and get public policies right: stabilization of macroeconomic conditions must continue, the legal and regulatory framework to encourage entrepreneurship and rapid growth of successful small businesses must be put in place and reform of the public sector itself must continue.
- If these conditions are in place, investment in research and development could deliver major returns. But it must be recognized that such investments are costs whose purpose is to generate growth, not waste. The Prime Minister Erdoğan reminded that his government decided to channel TL 450 trillion to TÜBİTAK. He also announced that Turkey would participate in the 7th Framework Programme of the EU.
- In particular, there is a role for science and technology in the re-engineering and modernization of the agriculture sector that will be necessary as Turkey prepares for EU accession. Biotechnology provides significant potential in this domain although the need for caution and possible risk was also flagged.
- Science and Technology more generally, and the ability to apply them, underpin much of the innovation which contributes to the dynamism of the knowledge economy. Taking full advantage of their potential requires a developed intellectual property management system and good links between the business sector and the science system which facilitates commercial exploitation of research generated in higher education and public research sectors. It is strongly noted that intellectual property protection is important to encourage innovation and creativity in the information society.
- A strong human resource base is the essential source of productivity, competitiveness and quality jobs in the knowledge economy. The education, training, knowledge and skills of the Turkish population will determine Turkey’s ability to adapt to the challenges facing it and compete on an international scale. The failure to invest in the young population could turn this great asset of Turkey into a liability.
- It is recognized that education, knowledge, information and communication are at the core of human progress, endeavors and well-being. The rapid progress of the related technologies opens completely new opportunities to attain higher levels of development.
- It is understood that high technologies should be regarded as tools and not as an end in themselves. Under favorable conditions, these technologies can be a most powerful instrument, increasing productivity, generating economic growth, job creation and employment and improving the quality of life of all.
- It is underlined that the benefits of technology revolution are today unevenly distributed not only between the developed and developing countries but also within nations and societies. A full commitment is needed to turning this digital divide into a digital opportunity for all.
- Innovation is a vital enabler of growth through efficiency gains and increased productivity, in particular by SME’s. In this regard, the development of the information society is important for broadly based economic growth in both developed and developing economies. Policies that foster productive investment and enable firms, notably SMEs to make the changes needed to seize the benefits from technologies are likely to be the most beneficial.
- It is again underlined that the backbone of our population, young people, is the future workforce and leading creators and earliest adopters of technologies. They must therefore be empowered as learners, developers, contributors, entrepreneurs and decision-makers. We must focus especially on young people who have not yet been able to benefit fully from the opportunity provided by technologies.
- Households, the business sector and civil society all will have roles to play in constructing the knowledge economy. It is realized that building a people-centered information society is a joint effort, which requires cooperation and partnership among all stakeholders i.e. a new form of solidarity among government, the private sector, civil society and international organizations.
- Development of an overarching strategic vision focused on joining the ranks of the global premier league by 2023, fostering a truly inclusive public-private partnership and communicating it to the whole population is essential.
- Finally, recognizing that new technologies and innovation are progressively changing our working practices, the creation of a secure, safe and healthy working environment, appropriate to the utilization of ICTs, respecting all relevant international norms and regulations, is fundamental.
6. Participants at the Forum recognized that progress in Turkey to date has not been enough to keep up with the rapidly changing and dynamic external environment. Prime Minister Erdoğan stressed the need for catching up with the advanced knowledge economies and position Turkey effectively on the basis of its strengths and potentials. Two important obstacles stand out. First, the Government is grappling with the difficulties of integrating the key elements of its strategy into a single coherent and practical approach to policy that fosters the use and application of knowledge on the ground. Second, bringing together private entrepreneurs, public institutions and civil society into a broad, purposeful partnership able to join forces to strengthen Turkey’s competitiveness is a major challenge.
7. Thus, action is required. The participants at Forum Istanbul concurred that it was essential to avoid patronizing top-down formulations and visions and build on the unique skills and qualities of the Turkish people with practical and liberating measures. Yet it was also recognized that the government has a key role in setting out the strategic orientations in light of extensive stakeholder consultations. At a strategic level action should be governed by broad principles:
· Insist on maximum openness and democracy in society, with freedom to express, to innovate, to compete and to challenge conventional methods and ideas, combined with restraint and responsibility on the part of all those who hold power.
· Spread the benefits of growing wealth generously through wider ownership of assets and property.
· Harness both private enterprise and the public sector to deliver a high and reliable quality of public services and national infrastructure.
· Look also wider than the European Union for markets, partners and sources of good practices, particularly to the great growth areas of the coming decades in Asia as Turkey is uniquely placed (in fact better placed than other European states) to interact with the new economic superpowers of this region.
8. More concretely, the European Union’s Lisbon Agenda, although over-ambitious and in some respects is designed to meet challenges such as those relating to ageing societies that Turkey does not face at this point in time, contains many elements that provide a good action-oriented guide for policy-makers. Where appropriate, clear time-bound goals and numerical targets should be defined so that progress can be easily monitored.
· Put the encouragement of enterprise, small and large, at the center of policy, simplify and streamline towards more efficiency in tax and regulatory burdens on enterprise and innovation, facilitate access to low-cost finance, encourage responsible corporate governance and welcome good quality foreign investment warmly.
· Tackle all monopolies, including relevant state monopolies, and maximize competition on all fronts. Ensure a fair and uniform application of competition rules; streamline State Aid to appropriate levels coherent with those in the EU.
· Define a clear regulatory framework for electronic communications markets and encourage the spread of information and communications technologies.
· Put resources into education and training, to promote maximum literacy and numeracy, adopt education and training systems for the knowledge society, fostering life-long learning for all, promote and facilitate mobility of people, within sectors, across sectors and internationally; also remember that the individual minds and the innovators carry a nation forward and must not be held back.
· Stimulate innovation by providing an environment conducive to high returns on research and development, promoting new technologies, and making Turkey an attractive place for its best brains to live and work.
· Create networks allowing Turkish researchers abroad to contribute to scientific and technological development in Turkey.
· Strengthen Turkey’s coordination mechanism at government, private sector and civil society levels for coherent and consistent policy actions, enhance the implementation capacity of the government, and assign a senior minister in the cabinet as exclusively responsible for this crucial dossier.
9. Let us make no mistake: the Knowledge Economy is no panacea. But it constitutes a crucial potential if we are able to grasp it that can play a decisive role in improving our competitiveness by raising production quality and integrating development, production and marketing networks. Not least, strong moves in that direction would contribute to Turkey’s EU accession efforts by hastening the convergence and integration of its economy with that of the EU in particular and of the global system at large. Turkey’s contribution to the achievement of the Lisbon goals would play a significant role in this vein.
10. The key challenge is to agree on who will do what, within what timeframe, by which resources, how to effectively implement the actions, and more importantly build the necessary human and institutional capacities.
